Is Lydall, Inc. (NYSE:LDL) a superb investment today? The smart money is getting less bullish. The number of bullish hedge fund positions were cut by 1 in recent months.
In the 21st century investor’s toolkit, there are many gauges shareholders can use to watch Mr. Market. A pair of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite hedge fund managers can outpace their index-focused peers by a significant margin (see just how much).
Equally as important, optimistic insider trading sentiment is a second way to parse down the marketplace. There are lots of motivations for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the market-beating potential of this method if shareholders know what to do (learn more here).
Keeping this in mind, we’re going to take a peek at the latest action surrounding Lydall, Inc. (NYSE:LDL).
How have hedgies been trading Lydall, Inc. (NYSE:LDL)?
In preparation for this year, a total of 8 of the hedge funds we track were long in this stock, a change of -11% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably.
Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in Lydall, Inc. (NYSE:LDL), worth close to $10.6 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $3.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Mario Gabelli’s GAMCO Investors, Warren Lichtenstein’s Steel Partners and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
Due to the fact that Lydall, Inc. (NYSE:LDL) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few money managers that slashed their positions entirely at the end of the year. It’s worth mentioning that D. E. Shaw’s D E Shaw said goodbye to the biggest position of the “upper crust” of funds we track, worth about $0.4 million in stock. These transactions are interesting, as aggregate hedge fund interest fell by 1 funds at the end of the year.
What have insiders been doing with Lydall, Inc. (NYSE:LDL)?
Bullish insider trading is most useful when the company in question has experienced transactions within the past six months. Over the last half-year time period, Lydall, Inc. (NYSE:LDL) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Lydall, Inc. (NYSE:LDL). These stocks are Blue Wolf Mongolia Holdings Corp. (NASDAQ:MNGL), Hyde Park Acquisition Corp II (NASDAQ:HPAC), Global Eagle Acquisition Corp (NASDAQ:ENT), New Mountain Finance Corp. (NYSE:NMFC), and Steel Partners Holdings LP (NYSE:SPLP). This group of stocks belong to the conglomerates industry and their market caps resemble LDL’s market cap.
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| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Blue Wolf Mongolia Holdings Corp. (NASDAQ:MNGL) | 6 | 0 | 0 |
| Hyde Park Acquisition Corp II (NASDAQ:HPAC) | 6 | 0 | 0 |
| Global Eagle Acquisition Corp (NASDAQ:ENT) | 0 | 0 | |
| New Mountain Finance Corp. (NYSE:NMFC) | 6 | 7 | 0 |
| Steel Partners Holdings LP (NYSE:SPLP) | 3 | 0 | 0 |
With the results exhibited by the aforementioned strategies, everyday investors must always watch hedge fund and insider trading activity, and Lydall, Inc. (NYSE:LDL) is an important part of this process.